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< prev - next > Food processing KnO 100189_Carrying out a feasibility study (Printable PDF)
An idea for a business is not a sufficient reason to begin
production straight away. It is essential to be aware of the different aspects involved in actually
running the business. To reduce the risk of failure, producers should first go through the following
aspects and finally develop a business plan.
1. Assess yourself as an entrepreneur
The success of any business depends largely on the entrepreneur’s personal characteristics, skills
and financial situation. To be a successful entrepreneur you need to:
Have a strong commitment to your business
Have strong motivation to own your business
Be able to take considered risks and to make important decisions
Have the support of your family and friends
Have the necessary technical skills to produce the product of your business
Have enough business management skills, such as selling, record keeping and costing, to
run a business of your own
Have sufficient knowledge of your line of business
Have sufficient personal funds.
2. Conduct a feasibility study
To reduce the risk of failure it is necessary to decide whether the idea is feasible. This involves
carrying out a short market survey and feasibility study. The following are the stages of a
feasibility study:
1st stage: Market feasibility
Market research
Selling strategy
Expected market size/share
2nd stage: Technical feasibility
Scale of production needed to meet
market share
Equipment, materials, services and
labour needed for scale of
production selected
Quality control
3rd stage: Financial feasibility
Start-up costs
Loan required
Cash-flow for one year (income and
Business development over three years
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